Minimum Wage, Maximum Folly

The fact of the matter is that increases in minimum wages have had a devastating impact on American Samoan workers. In my "Minimum Wage Cruelty: Update" column of May 26, 2010, I wrote: "Chicken of the Sea International moved its operation from Samoa to a highly automated cannery plant in Lyons, Ga. That resulted in roughly 2,000 jobs lost in Samoa and a gain of 200 jobs in Georgia. StarKist, the island's remaining cannery, announced that between 600 and 800 people will be laid off over the next six months, reducing the company's Samoan workforce from a high of more than 3,000 in 2008 to less than 1,200 workers." According to SamoanNews.Com, in August, 300 workers received layoff letters in phase one of Starkist's downsizing plans.

Stephen Dinan, The Washington Times staff writer who wrote "Territories snared in wage debate," (10/18/10) said, "A number of those involved with the minimum-wage issue appeared not to want to talk about it. The White House didn't return a call seeking comment, nor did the AFL-CIO, the chief umbrella group for labor unions."

Does the law of demand that we've seen applying to American Samoa also apply to the U.S. mainland? It does and particularly for teenagers and especially black teenagers. In 2007, the unemployment rate for all teens was 15 percent; today it's 25 percent. For black teenagers, in 2007, unemployment was 26 percent; today it's over 50 percent. Overall unemployment is a little over 9 percent. Those who argue that the minimum wage has no effect on labor markets in the U.S. but has an effect in American Samoa are either liars, lunatics or idiots, and that includes those 650 economists who signed that petition suggesting that a "modest increase in the minimum wage would improve the well-being of low-wage workers."

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'

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